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Exclusive: Greenwashing? Saudi Aramco’s efforts ‘speak for themselves,’ Chairman says


With growing demand for energy, especially in developing countries, Saudi Aramco is embarking on the largest capital program in its history to prevent supply shortages and safeguard energy security while it simultaneously continues to beef up its investment in renewable energy.

However, this has been met with criticism on the global stage as many have accused the company of “greenwashing,” a term used for companies accused of making superficial or insincere sustainability efforts.

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When asked about Saudi Aramco’s response to these allegations, the company’s Chairman Yasir al-Rumayyan told Al Arabiya English in an exclusive interview that its “efforts speak for themselves,” adding that it remains committed to investing in renewable energy whilst also ensuring that it contributes to the increasing global demand for oil and gas.

“We remain committed to improving our ability to tackle emissions through our initiatives in blue hydrogen and ammonia, as well as advanced non-metallic materials with potential to enable innovative product development,” he added.

Saudi Aramco was the first company to complete a blue ammonia shipment, an achievement it registered in 2020 and – along with Saudi Basic Industries Corporation (SABIC), received the world’s first accreditation for blue hydrogen and ammonia production in 2022, which al-Rumayyan believes emphasized “the role that Hydrogen will play in the future energy systems.”

“We are also working with our partners to help reduce emissions across the whole value chain of our products, with a strong emphasis on technological innovation, research and development.”

Aramco’s role in the global green energy transition

Saudi Arabia and its state-owned oil company, Saudi Aramco, have made significant contributions to the world’s green energy transition. The company has recognized the need to reduce its carbon footprint and transition to cleaner forms of energy.

The company’s first Sustainability Report, released last year, lays out a concrete plan to reduce emissions by 2035. This plan includes investing in renewables, Carbon Capture, Utilization, and Storage, energy efficiency improvements, methane and flaring reduction, and offsets.

“Last June, our inaugural Sustainability Report outlined a number of specific interim targets for 2035, and our plan is to reduce our already low upstream carbon intensity, [which is] among the lowest in the world, by at least 15 percent by 2035, against our 2018 baseline,” al-Rumayyan said.

Aramco’s greenhouse gas (GHG) emissions management program accounts for the direct (Scope 1) and indirect (Scope 2) emissions from wholly owned and operated assets.

“We aim to reduce or mitigate net Scope 1 and Scope 2 GHG emissions across our wholly-owned operated assets, both in the Upstream and Downstream segments, by more than 50 million metric tons of CO2e annually by 2035, when compared to the business-as-usual forecast,” al-Rumayyan said.

“We are a founding member of the Oil and Gas Climate Initiative, which drives collective action at the industry level,” he added.

In October last year, Aramco unveiled its $1.5 billion Sustainability Fund, one of the world’s largest sustainability-focused venture capital funds, to invest in technologies with the potential to address climate changes.

“Recently, we announced a new CCS [Carbon Capture and Storage] Hub, which is intended to capture up to nine million metric tons of CO2 per year by 2027,” al-Rumayyan explained, highlighting the many initiatives it has launched to contribute to the world’s green energy transition.

In addition, Aramco is also developing technologies related to the Circular Carbon Economy, a framework for managing and reducing emissions by maximizing the re-use of resources to eliminate carbon costs of producing new materials.

In al-Rumayyan’s words, the Circular Carbon Economy aims to “reduce, reuse, recycle and remove CO2 emissions.”

The year ahead

With demand for oil and gas expected to grow in the year ahead, Saudi Aramco will expand its production to meet rising demand while also investing in new energy sources such as blue hydrogen, blue ammonia, e-fuels and renewables.

“Our aim is to deliver an optimum mix of reliable, affordable and more sustainable energy,” the chairman said.

“Some of our objectives include increasing our liquids to chemicals production to 4 million barrels per day by 2030, developing low-carbon ammonia production of 11 million metric tons per year by 2030, becoming a global leader in CCS, with a goal to capture, utilize or store 11 million metric tons of CO2 equivalent annually by 2035, and developing 12 GW of renewable energy capacity by 2030.”

Governments and oil companies are increasingly investing in renewable energy due to the growing recognition of the pressing need to address climate change.

The burning of fossil fuels, such as oil and gas, is a significant contributor to the increase in atmospheric greenhouse gases, which trap heat and cause global warming. This, in turn, results in a range of negative impacts on the environment, including rising sea levels, more frequent and severe natural disasters, and damage to ecosystems and biodiversity.

Renewable energy – such as solar, wind, and hydrogen – provides a clean alternative to fossil fuels that does not emit carbon dioxide and other greenhouse gases.
As the cost of renewable energy technologies continues to decline, it is becoming increasingly economically viable to invest in these energy sources.

By transitioning to renewable energy, governments and oil companies can reduce their carbon footprint and contribute to global efforts to mitigate the impacts of climate change.

Read more:

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Saudi Aramco signs deals worth $7.2 bln to spur digital transformation

Saudi Aramco sees oil demand picking up on China and aviation recovery

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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